LeEco in deep water after failing to meet debt payment deadline

Source:Global Times Published: 2017/7/21 20:03:39

Beijing-based technology and entertainment company LeEco has missed the first phase of its debt payment to Shanghai Qicheng Assets Management Co due on July 7 for the $80 million convertible private fund the latter invested, according to domestic media reports.

The first phase of the debt payment amounted to $75 million. The second phase, set at $5 million, will be due on August 17, domestic news portal caixin.com reported on Friday.

LeEco has come up with two alternative solutions. One is to prolong the payment time for another year and make the payment periodically within the next year. The other is converting the bond into equities of LeEco's non-listed sectors such as the automobile division.

According to the report, the private fund, set up in May 2015, has been invested in the preferred stock bonds of LeEco's overseas subsidiary LeView Mobile. The investment was guaranteed by LeEco and its founder Jia Yueting.

Shanghai Qicheng has sent notices to LeEco three times since mid-March, informing the latter of bond redemption. Representatives of the Shanghai Qicheng also met with Jia in June to discuss the possible solutions and at the time, Jia said that he would be responsible for all the liabilities under LeEco.

The report also stressed that so far, there are about 50 private bonds that have been invested in different sectors under LeEco, but many of the investors are trying to hurriedly withdraw their investments after the recent financial troubles in LeEco.